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Photo of Valley Forge
National Historic Park by James Lemass

Employment: Is Bush Trying
to Eliminate Overtime?

The Left Says:

"As early as March 2004,
President George W. Bush could take away working people's hard-fought
40-hour workweek and overtime -- with no meaningful increased
flexibility to help workers balance demands of jobs and family."

The President is doing no such
thing. Under a Labor Department proposal to update and reform
the 1938 Fair Labor Standards Act, the 40 hour workweek would
remain in place, and so would overtime pay.

Here's how the Department of Labor describes
what its proposal would do:

"For the first time since 1975, the Department's proposed
regulations would raise the salary threshold -- below which workers
would automatically qualify for overtime -- from $155 a week
to $425 a week, or $8,060 per year, to $22,100 per year The impact
of this revision will be to increase the wages of 1.3 million
lower-income workers and reduce the number of low-wage salaried
workers currently being denied overtime pay. Other proposed changes
include revising job duties required to qualify for the exemption
to better correspond to 21st century workplace realities. The
old regulations, written in 1949, mention job classifications
that no longer exist, such as key punch operators, straw bosses,
leg men and gang leaders. Clarifying which job duties qualify
for overtime pay will help workers and employers easily determine
overtime entitlement for millions of workers whose status is
currently unclear." (1)

Secretary of Labor Elaine Chao is adamant
that organized labor's scare campaign represents what the DOL
calls "myths, distortions and inaccuracies": "The
Department's overtime reform proposal will not eliminate overtime
protections for 8 million workers, will not eliminate overtime
protections for police officers, firefighters, paramedics and
other first responders, will not eliminate overtime protections
for nurses, will not eliminate overtime protections for carpenters,
electricians, mechanics, plumbers, laborers, teamsters, construction
workers, production line workers and other blue-collar employees;
and will not affect union workers covered by collective bargaining
agreements. The Department's reform will strengthen overtime
protections for millions of low-wage and middle-class workers,
will empower workers to understand and insist on their overtime
rights, will enable the Department of Labor to vigorously enforce
the law, will prevent unscrupulous employers from playing games
with workers' overtime pay, and will put an end to the lawsuit
lottery that is delaying justice for workers and stifling our
economy with billions of dollars in needless litigation."(2)

Analyst Paul Kersey of the Heritage Foundation
agrees: "by raising the minimum salary level needed for
'white collar' status, the Labor Department is returning to the
original intent of the Fair Labor Standards Act - to protect
unskilled manual laborers from the dangers of overwork. By limiting
work hours, Congress meant to reduce the dangers of fatigue and
workplace accidents and allow workers more time for recreation,
family and education. Executives, administrators and professionals
were excluded because they were seen as having both higher compensation
and greater job security, giving them better control over their
own work hours."

Kersey adds: "The drafters of the
original Fair Labor Standards Act probably would be shocked to
learn that, under today's rules, a cook earning $13,000 a year
can be considered an executive because he supervises two kitchen
workers, while a technician with a $70,000 salary can receive
mandatory overtime pay. More straightforward regulations will
make enforcement of the wage-and-hour laws easier. Thus unskilled
workers, the employees who have the least control over their
working hours and conditions, will receive the maximum level
of protection. Under the new rule, any worker receiving a salary
of less than $20,000 will be eligible for overtime, regardless
of his or her job duties."(3)

Heritage Foundation President Ed Feulner
says "Chao [is] trying to make life better for low-income
laborers... Today, companies can classify employees who make
just $8,061 per year as 'exempt' meaning they would be ineligible
for overtime. Chao has proposed raising that threshold to $22,000,
a step that would immediately make an additional 1.2 million
workers eligible for time-and-a-half. While that change would
help the poorest laborers, it wouldn't hurt most blue-collar
workers. Union members who work under collective bargaining agreements
would make at least as much under the new proposal as they do
today. This includes most firefighters, nurses and police officers."

So why the fuss over a proposal designed
to help low-income workers?

Feulner pins responsibility on a group that benefits financially
from the current outdated system: Trial lawyers.

Feulner writes: "Because current
law is so confusing, many companies struggle to determine which
jobs are eligible for overtime, and which are not. Trial lawyers
exploit this confusion: They pore over work roles until they
find groups that seem mislabeled, and then file class-action
lawsuits. It's a booming business. In 2001 there were more suits
filed over overtime pay than suits alleging discrimination in
the workplace. And why not? If a lawyer can convince a court
to agree that a company has made a mistake, he can force that
company to shell out millions of dollars in back pay. For example,
two years ago, the Farmers Insurance Exchange of California was
slapped with a $90 million judgment because it hadn't been paying
overtime to its claims adjusters. More recently, Radio Shack
and Starbucks surrendered without a fight. Those companies coughed
up $30 million and $18 million, respectively, to settle out of
court with store managers."

Concludes Feulner: "Under Chao's changes, those white-collar
workers who make more than $65,000 would lose their right to
overtime under the new laws. But keep in mind the original reason
for such laws: To benefit poor laborers. Middle-class managers
and professionals were never supposed to be covered."(4)